The hype around artificial intelligence (AI) hasn’t cooled off this year. In 2024, news about companies scrambling to adopt this tech has taken center stage in datacentre discussions.
All three major public cloud providers—Amazon Web Services, Microsoft, and Google Cloud Platform—are ramping up their datacentre investments in the UK. They aim to accommodate the increasing demands of AI workloads. Market analysts are already pointing out that more space and power are necessary to handle this surge.
Since taking office in July 2024, the new government has pledged to ease planning regulations for new datacentre construction. This move aims to speed up the development of server farms, fostering economic growth in the process. However, it remains unclear how datacentre operators and cloud companies can achieve their growth targets while keeping their commitments to sustainability and net-zero emissions.
Each of the hyperscale providers has announced significant investments in AI-focused datacentres. GCP kicked things off in January 2024, planning a $1 billion facility in Waltham Cross, Hertfordshire. Microsoft followed in July with a commitment of over $13 billion for AI and cloud datacentres. AWS made a multibillion-dollar pledge in September for new AI-ready datacentres throughout the UK.
Despite these ambitious plans, the IT research group Gartner cautioned in November 2024 that this datacentre expansion could lead to energy supply issues by 2027. Bob Johnson from Gartner pointed out that the rapid growth in hyperscale datacentres for GenAI is driving an overwhelming demand for electricity, which may outstrip utility capabilities in the near future. This situation could disrupt energy availability and limit further datacentre development.
The Uptime Institute also flagged concerns early in the year. It highlighted that datacentre operators might struggle in 2024 to align their business objectives with sustainability goals as the thirst for computational power escalates. The year could see some operators having to revise their sustainability targets downward due to the demand for energy-intensive AI technologies and the current lack of renewable energy sources.
JLL echoed these warnings in January 2024, advising datacentre operators to rethink how they construct and manage their facilities. With AI workloads consuming more energy than ever, they need to design datacentres that can support larger IT capacity while also innovating their cooling and power strategies.
As operators grapple with these challenges, they’re facing an unprecedented shortage of spare datacentre capacity across major European hubs. CBRE reported that in August 2024, surplus space reached an all-time low in areas like Frankfurt, London, Amsterdam, Paris, and Dublin. This scarcity is compounded by land shortages and power supply issues, which hinder the development of new facilities.
In June 2024, news broke that a significant datacentre project in Iver, Buckinghamshire, was denied planning permission for the second time due to its location on Green Belt Land.
The new Labour government, after promising in its pre-election manifesto to reduce barriers to datacentre construction, quickly garnered support from operators by reconsidering projects that had faced earlier denials. In the lead-up to the election, they emphasized the datacentre sector as a crucial driver for economic growth and vowed to streamline the approval process.
In July 2024, alongside reviewing previously denied projects, the government launched a consultation aimed at lowering planning restrictions for new datacentre developments. Potential changes could allow designated “grey belt land” within protected Green Belt areas to be utilized for development.
By September 2024, the government announced that datacentres would be classified as critical national infrastructure, recognizing their vital role in the UK’s digital economy.
However, despite these promising developments, the government faces pressure from TechUK, a trade association, to do more. They argue that the datacentre sector has the potential to be one of the UK’s fastest-growing industries, but achieving this requires better cooperation between industry players and government decision-makers. Improving grid connections, facilitating access to renewable energy sources, and addressing the skills gap in the datacentre workforce are some areas where TechUK sees room for improvement.